I think you're right, what he said is misleading. However, it's sort of extraneous to his point, no? He's not touting his nonexistent war record as evidence of his leadership or courage or anything along those lines (correct me if I'm wrong - I watched the video you linked, but haven't gone back and read/watched other speeches he's given). Rather, he's using to support his claim that he witnessed the poor treatment of servicemen and women returning from Vietnam. Now, I don't think anyone doubts that that last point is true, since most Americans living in that era would've borne witness to that, but then, given that that was the case, the assertion of his own service is besides the point unless he thought it added weight, and it adds weight because of the misrepresentation that he went through that mistreatment himself when presumably he did not.
Still, regardless of how significant a misrepresentation it is, it's dishonest, and it seems like the only thing for Blumenthal to do going forward is apologize, say he never intended to misrepresent his own service record (whether or not that's the case, that's what he'll have to say), and hope the voters are sympathetic. Of course, at that point it boils down to what Kepler is always saying: people who are predisposed to vote for him are going to accept him at his word that it was an unintentional misrepresentation and vote for him anyway, and people who are predisposed to vote against him are going to believe that he was lying about his record intentionally in order to bolster his own credibility and vote against him, and we'll be more or less back where we started.
